Final Multiple Choice Flashcards
(40 cards)
Examples of Projects
Project:
unique, one-time operational activity or effort
Examples:
Constructing: houses, factories, shopping malls, athletic stadiums, arenas
Developing military weapons systems, aircrafts, new ships
Launching satellite systems
Constructing oil pipelines, dams, bridges
Developing and implementing new computer systems
Planning concert, football games, or basketball tournaments
Introducing new products into market
Characteristics of Projects
non repetitive, one of a kind, subject to high uncertainty, etc.
Key person involved in PM
project mgr.
Project team characteristics
Cross functional with diff. skills (engg., mktg., HR, prodn., A/c)
What is Work Breakdown structure (WBS)
Breakdown project into modules, sub-components, tasks, activities for scheduling / planning; responsibility (job description) assignment - SOW)
• Gantt Chart
Graph with a bar representing time for each activity in the project
Provides visual display of project schedule
- When activities start, finish (activities ahead/ behind schedule)
- Where extra time is available and which activities can be delayed
Slack definition, Advantage of slack
allows resources to be temporarily diverted from activities with slack and used for other activities that might be delayed.
CPM/PERT
• Critical path – longest path in the N/W, project cannot be completed in less time than the time reqd. by the critical path, min. completion time of project)
EF=
LS=
EF=ES+t;
LS=LF-t
Forward pass
Backward pass
- Forward pass used to calculate earliest start and finish times
- Backward pass used to calculate latest start and finish times
ES=
LF=
- ES=max of EF of immediate predecessors
* LF=min of LS of immediate successor activities
• For activities on critical path ES=EF and LS=LF & slack = 0
o This implies
Activities on critical path cannot be delayed at all. If any activity on critical path delayed, overall project is delayed
Probabilistic activity times can be described by
beta distribution
Mean of beta distribution =
(a+4m+b)/6
Total project variance =
• sum of variances of activities on critical path
• Project crashing definition
o Indirect cost increases as project duration increases
o crashing cost increases as project duration is reduced
o optimal project time is the one at min. cost
• Objectives / Role of inventory
To meet uncertainty
To provide independence from vendors (supply uncertainty)
To provide independence between stages, thus avoid work stoppages (uncertainty within org.)
To meet seasonal or cyclical demand (demand fluctuations)
To take advantage of price / Qty. discounts
To hedge against future price increases
What is ordering cost ?
cost incurred each time an order is placed to replenish inventory (paperwork/documentation (POs), shipping & transportation, receiving, inspection, handling, accounting & auditing costs)
As number of orders increases, ordering cost increases
Any cost that increases linearly with the # of orders is ordering cost
Normally expressed as $/order
Annual ordering cost = cost/order x # of orders
What is carrying cost ?
cost of holding an item in inventory (facility storage - rent, depreciation, power, heat, lighting, refrigeration, security, taxes, insurance, material handling, labor, product deterioration, spoilage, obsolescence, pilferage, opportunity costs)
Greater the inventory, more the carrying costs
Any cost that increases linearly with the # of units carried is carrying cost
Annual inventory carrying cost in USA estimated to be > $30B
Commonly expressed as $/unit/year
Annual carrying cost = cost to carry one unit x average # of items carried
Ordering costs react inversely to carrying costs. how
As the size of orders increases, fewer orders are required, reducing ordering costs. However, ordering larger amounts results in higher inventory levels and higher carrying costs. In general, as the order size increases, ordering costs decrease and carrying costs increase.
Uncertainty is caused due to
uncertainty is created by poor quality on the part of the company or its suppliers or both. This can be in the form of variations in delivery times, uncertain production schedules caused by late deliveries, or large numbers of defects that require higher levels of production or service than what should be necessary, large fluctuations in customer demand, or poor forecasts of customer demand.
Types of inventory
Raw materials
Work-in-process (partially completed products) (WIP)
Finished Goods
Pipeline inventory (Items being transported)
MRO (Maintenance, Repair and Operations) supplies
Purpose of inventory management
“To meet uncertainty of demand/supply”
Dependent demand items ?
Demand for items that are used to produce final product (i.e. dependent on other parts, items, or final products)
Ex: Tires, seats, engine, PC parts, etc.
